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Restructuring scandal-hit Vatican bank

Monday, July 14, 2014 - 02:08

The Vatican has announced major changes to its economic structures and appointing a new head in a bid to move on after years of scandal surrounding the Vatican bank. Joanna Partridge reports

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Child abuse allegations have rocked the Catholic Church in recent years. And the Vatican bank - which handles church funds - is also being cleaned-up. The accounts of more than 2,000 clients have been blocked and 3,000 "customer relationships" ended. The clean-up has almost wiped out profit at the bank - officially known as the Institute for Works of Religion. In 2012 it made almost 87 million euros, last year the figure was less than 3 million. Australian Cardinal George Pell has been overseeing the Vatican's finances in recent months. (SOUNDBITE) English) AUSTRALIAN CARDINAL GEORGE PELL SAYING: "We are aiming at substantial transparency. There will be annual audited reports and these reports will be audited externally ... Our ambition is to become something of a model of financial management rather than a cause for occasional scandal." The bank has been hit by years of scandal, including allegations of money laundering and tax evasion. Pope Francis has recently been trying to stamp out the abuses. Tom Elliott from Devere Group says there's no chance it will collapse. SOUNDBITE: Tom Elliott, International Investment Strategist, Devere Group, saying (English): "The Vatican Bank will definitely survive because it's got the Catholic Church behind it but it's all part of a long term process of cleaning itself up after being basically allowed to engage in practices with loose internal controls that have long been frowned on outside of the Vatican Bank in broader banking circles." The restructuring cost 400 million euros. But the bank says it has now turned a corner and results for the first half of 2014 showed a net profit of more than 57 million euros. French businessman Jean-Baptiste de Franssu will be its new head. A separate department will be created to manage the Holy See's assets - leaving the bank to focus on its original aim of payment services for religious orders, Vatican employees and charities.